US Dollar: Bullish Price Signals Clash With Gloomy Macro Backdrop

Fundamentals point one way, charts another. Weak U.S. data and Hassett speculation should weigh on the , but price signals across major pairs hint at a rebound.
ISM PMI shows deeper contraction in new orders and jobs
Hassett seen as frontrunner for Fed chair, odds near 80%
DXY rebound delivers a bullish pin candle on the daily chart
and price signals favour USD upside
Summary
The US dollar is showing signs of near-term strength, with price signals pointing to upside even as the macro backdrop argues otherwise. Monday’s reinforced the soft tone in U.S. data, showing deeper contraction in new orders and employment.
At the same time, speculation is mounting that President Trump will appoint Kevin Hassett as the next Fed chair, a move widely seen as ultra-dovish and aligned with Trump’s push for lower rates. These factors would typically weigh on the greenback, yet price action suggests traders are leaning toward strength rather than weakness.
This divergence between fundamentals and technicals is striking. While economic signals and hint at looser policy ahead, the dollar’s charts tell a different story, with key levels holding firm and bullish setups emerging across major pairs.
Price signals on the (DXY), EUR/USD, and USD/CHF charts now point to the potential for a US dollar rebound, reinforcing the case for near-term strength.
DXY False Break?
Source: TradingView
It may only be early days, but there are already question marks over whether the bearish break on the DXY daily chart will stick. Not only did we see a rapid rebound after testing the 50DMA, but the subsequent reversal also helped deliver a bullish pin candle, pointing to the potential for near-term upside.
Former uptrend support located just above 99.50 is the key area of interest should we see an extension of the bounce. A sustained push above the uptrend would allow for longs to be established with a stop below for protection. The 200DMA looms as an early hurdle for bullish setups, making it a level to assess whether to hold or abandon depending on how the price interacts with it should it trade there. If the DXY clears the 200DMA, the obvious target for longs would be 100.25 resistance, where previous bullish moves stalled in November.
While the price action warns of near-term upside risk for the DXY, it has yet to reclaim the former uptrend, keeping the prospect for shorts alive should the bounce stall around these levels. If the signal proves to be false with DXY unable to push higher, shorts could be set beneath the uptrend with a stop above it or the 200DMA for protection. The zone consisting of the 50DMA and 99.00 support looms as a logical initial target, with 98.60 and 98.08 other options should the unwind extend further.
The message from the oscillators favours a neutral bias, placing more emphasis on price action to guide direction. RSI (14) sits just beneath the neutral 50 level while MACD has crossed the signal line but remains in positive territory, providing an overall inconclusive message.
EUR/USD Breakout Fails above 50DMA
Source: TradingView
The message from the EUR/USD chart is a near-mirror image of the DXY, with a shooting star candle printing on the dailies following a failed bullish breakout attempt above the 50DMA. The large reversal from known horizontal resistance at 1.1650 explains much of the recovery in the DXY on Monday, pointing to the potential for further near-term downside ahead.
For those considering shorts, positions could be established beneath the 50DMA with a stop above for protection, with 1.1607, 1.1578 and 1.1550 levels that screen as potential targets, depending on desired risk-reward.
Alternatively, if the price reverses back above the 50DMA, the setup could be flipped, allowing for longs to be established with a stop below for protection, targeting a retest of 1.1650 resistance initially.
Momentum indicators are not delivering a clear signal on directional bias, sitting in neutral territory. Emphasis on price action to guide decision-making is therefore preferred in the near term.
USD/CHF Bulls Eye Upside
Source: TradingView
USD/CHF is another pair that delivered a clear bullish signal for the USD on Monday, printing a hammer candle following a failed attempt to break beneath the 50DMA/0.8000 support zone. With RSI (14) and MACD retaining a marginal bullish message when it comes to directional bias, the combined signals point to upside risks.
With the price sitting above 0.8037, a minor level that previously acted as support, it can be used to build bullish setups around, allowing for longs to be established above it with a stop below for protection. 0.8071 or 0.8100 screen as possible targets.
Assessing Event Risk
Source: TradingView (U.S. ET shown)
For anyone considering these setups, there are plenty of known risk events on the calendar over the coming days, although just how much impact they’ll have in the absence of a major surprise is questionable. Later Tuesday, euro area inflation and unemployment figures will drop for November, although data mapping techniques using national releases beforehand have become so accurate that neither report rarely delivers meaningful market volatility.
Realistically, given sensitivity to deflationary risks, the Swiss inflation report out tomorrow looks more important for USD/CHF directional risks. In the States, the key releases will be the monthly national employment report along with the , both due Wednesday.